Penn Foster 061692RR – Corporations (Requested July 2014)

Penn Foster 061692RR – CORPORATIONS1. Operating expenses—other than depreciation—for the year were $335,000. Prepaid expenses decreased by $7,000. Cash payments for operating expenses to be reported on the cash flow statement using the direct method would beA. $335,000.B. $7,000.C. $328,000.D. $342,000.2. Rick Company has declared a $40,000 cash dividend to shareholders. The company has 5,000 shares of $20 par, 6% preferred stock, and 10,000 shares of $15 par common stock. The preferred stock is noncumulative. How much will be distributed to the preferred and common stockholders on the date of payment?A. $34,000 preferred; $6,000 commonB. $6,000 preferred; $34,000 commonC. $40,000 preferred; $0 commonD. $0 preferred; $40,000 common3. Tammy Corporation has 350,000 shares of $3 par common stock outstanding. It has declared a 5% stock dividend. The current market price of the common stock is $7.50/share. The amount that will be debited to retained earnings on the date of declaration isA. $52,500.B. $183,750.C. $78,750.D. $131,250.4. What are the rate of return on stockholders’ equity and the rate of return on common stockholders’ equity (rounded to the nearest one-tenth of a percent) given the following information:Net Income $350,000Preferred Dividends 20,000Common Stock 48,000Common Stockholders’ Equity 1/1/2011 4,400,000Total Stockholders’ Equity 1/1/2011 5,300,000Total Stockholders’ Equity 12/31/2011 5,500,000A. Return on Stockholders’ Equity: 5.6 %; Return on Common Stockholders’ Equity: 6.7%B. Return on Stockholders’ Equity: 6.5 %; Return on Common Stockholders’ Equity: 7.6%C. Return on Stockholders’ Equity: 8.1 %; Return on Common Stockholders’ Equity: 9.2%D. Return on Stockholders’ Equity: 7.8 %; Return on Common Stockholders’ Equity: 8.9%5. What is the rate of return on equity if net income is $22,700; preferred dividends are $3,000; sales are $100,000; and average common stockholders’ equity is $86,000?A. 22.7%B. 26.4%C. 22.9%D. 86.0%6. Which section of the income statement does not report net of income taxes or net of income tax savings?A. Continuing operations sectionB. Cumulative effect of changes in accounting principles sectionC. Extraordinary items sectionD. Discontinued operations section7. If Rick’s net sales increased from $40,000 to $80,000 and its operating expenses increased from $30,000 to $50,000, then vertical analysis based on net sales would show which of the following for operating expenses for the two periods (to the nearest tenth of a percent)?A. 160.0% and 133.3%B. 62.5% and 75.0%C. 75.0% and 62.5%D. 133.3% and 160.0%8. Rick Company’s net sales decreased from $90,000 in year 1 to $45,000 in year 2, and its cost of goods sold decreased from $30,000 in year 1 to $20,000 in year 2. Vertical analysis based on sales would show which decreases in cost of goods sold for the two periods (rounded to the nearest tenth of a percent)? A. 300% and 225%B. 33.3% and 44.4%C. 225% and 300%D. 44.4% and 33.3%9. Birch issued 200 shares of $12 par common stock in exchange for a piece of equipment with a current market value of $3,000. Which of the following is not part of the journal entry for this transaction?A. Debiting equipment for $3,000B. Crediting common stock for $2,400C. Crediting common stock for $3,000D. Crediting paid-in capital in excess of par common for $60010. Birch issued 200 shares of $12 par common stock in exchange for a piece of equipment with a current market value of $3,000. Which of the following is not part of the journal entry for this transaction?A. Crediting Common Stock for $3,000B. Crediting Common Stock for $2,400C. Crediting Paid-in Capital in Excess of Par—Common for $600D. Debiting Equipment for $3,00011. Isaiah Corporation’s Accounts Receivable increased by $35,000, and its Accounts Payable decreased by $18,000. What is the net effect on cash from operations under the indirect method?A. ?$53,000B. +$35,000C. +$17,000D. ?$18,00012. Brandon Company had extraordinary losses of $150,000. If its corporate tax rate is 30%, at which amount will the losses be shown on the income statement?A. Not enough information is given to answer the question.B. $150,000C. $45,000D. $105,00013. Casey Company has an accounts receivable turnover of 36 days, an inventory turnover of 77 days, and an accounts payable turnover of 40 days. Casey’s cash conversion cycle is _______ day(s).A. 1B. 153C. 81D. 7314. Casey Company reported net income of $35,000; depreciation expenses of $20,000; an increase in accounts payable of $2,000; and an increase in current notes receivable of $3,000. Net cash flows from operating activities under the indirect method isA. $54,000.B. $56,000.C. $55,000.D. $50,000.15. Ryan Industries has an inventory turnover of 112 days, an accounts payable turnover of 73 days, and an accounts receivable turnover of 82 days. Ryan’s cash conversion cycle is _______ days.A. 121B. 103C. 43D. 916. Casey Company has a $2,400 credit balance in Paid-In Capital— Treasury Stock. It sells 500 shares of treasury stock that the company reacquired at $21/share, for $18/share. After the transaction, what will the balance be in the Paid-In Capital in Excess of Par— Treasury account?A. $3,900 creditB. $1,500 debit C. $900 debitD. $900 credit 17. The Amanda Corporation Stockholders’ Equity section includes the following information:Preferred Stock $12,000Paid-in Capital in Excess of Par— Preferred 2,700Common Stock 15,000Paid-in Capital in Excess of Par— Common 4,100Retained Earnings 8,200What was the total selling price of the preferred stock?A. $20,200B. $14,700C. $12,000D. $16,10018. For vertical analysis purposes, the base item on the income statement isA. gross profitB. net sales.C. total expenses.D. net income.19. The accuracy of the statement of cash flows can be verified by computing the change in the balance of theA. cash and cash equivalent accounts.B. equity account.C. asset and liability accounts.D. revenue accounts.20. The Isaiah Corporation Stockholders’ Equity section includes the following information:Preferred Stock $22,000Paid-in Capital in Excess of Par—Preferred 2,980Common Stock 48,000Paid-in Capital in Excess of Par—Common 3,400Retained Earnings 7,350Total par value of the preferred and common stock isA. $76,380.B. $77,350.C. $83,730.D. $70,000.